Confession alone no cure for Motorola

Motorola executives told a roomful of skeptical analysts Tuesday all about their strategy for a winning "triple play."

Apparently, whoever coined the term is not much of a sports fan. In baseball, a triple play is three outs, all from one at-bat. It's death to the offense.

Chief Executive Chris Galvin would like to return to the offensive after a year of dreadful struggle. At the very least, he would like to return Motorola to profitability. But prospects are so uncertain that president Robert Growney wouldn't even venture a guess about the company's financial performance for next year.

Motorola shouldn't be so much rooting for a triple play as fearing one.

Further setbacks in any of three key businesses--wireless communications, telephone and cable systems, and semiconductors--and many investors still holding Motorola might bail out. Despite a recent rally, the company's stock still is down nearly 70 percent from its March 2000 high.

More than just Motorola's near-term future is at stake. Galvin's own viability is in play, too.

Last summer, Galvin boldly and--it turns out--intemperately taunted his audience of analysts and big investors for failing to understand Motorola's strengths. This time, he all but begged forgiveness.

Galvin listed all the market forces that have hurt Motorola. The strong dollar. The burst Internet bubble. The weak economy. Cutthroat competitors.

We knew all that.

Next came the important words. Galvin offered a confession that never would have crossed his lips last year. "We understand clearly that the issue has been largely us and the changes that have to take place have to take place within Motorola," Galvin said.

This is the sort of thing chief executives tend to say when results are in the tank and their jobs are on the line. It also tends to be empty rhetoric--especially when the confession comes wrapped in so many disclaimers.

Galvin has to put action to the words or the Motorola directors who watched from the back row must take strong action.

Galvin feels the heat.

He has put new managers in place. He now measures success from the bottom line up--not from the engineering sketch outward. He digs into day-to-day decisions at the company. He has aggressively cut jobs and closed factories.

Galvin proudly declared he has ended the days of "warring tribes" of engineers and marketers. He has only "winning tribes" now. This might be impressive if it weren't the third year analysts have heard a similar claim.

Galvin is relying on rhetoric and only incremental change when a revolution is needed.

Fortunately, there are a few new executives on board who seem up to the job. Former General Electric Co. executive Mike Zafirovski brings a welcome action agenda to a wireless business that squandered a once-dominant position. Network systems chief Ed Breen, the former chief executive of Motorola acquiree General Instrument Corp., has begun coordinating a company-wide approach to bringing video, voice and data into homes--the vaunted triple play.

Motorola's directors still seem confident Galvin is the right CEO, with the right subordinates in place. "We've got the best management team I've seen in 25 years on this board," says former Harris Bank chief executive Ken West. "But nobody can see it" because of the tough business conditions.

Galvin has to find a way to help customers and investors see Motorola's strengths. If he can't, the board might have no choice but to show Galvin the door.